Exchange method and apparatus

ABSTRACT

Methods and data processing systems for securely communicating between a web server system and a client browser system by associating a secure hypertext transfer protocol (e.g., SSL or https) with a first port number (e.g., port 80) that is normally associated with a non-secure hypertext transfer protocol (e.g., http), thereby allowing secure communications using the secure protocol even through a data communications channel (e.g., one that includes a firewall system) that would block attempts to use the secure hypertext transfer protocol in association with its normal port number (e.g., port 443).

CROSS REFERENCE TO RELATED APPLICATIONS

[0001] This application claims priority from pending U.S. ProvisionalApplications: Appl. Ser. No. 60/056,815 filed on Aug. 22, 1997; Appl.Ser. No. 60/061,433 filed on Oct. 8, 1997; Appl. Ser. No. 60/066,526filed on Nov. 25, 1997 and the pending U.S. Non-Provisional applicationSer. No. 09/381,742 filed on Oct. 13, 1999 and International ApplicationNo. PCT/US98/17472 filed on Aug. 21, 1998; all of which are herebyincorporated by reference.

BACKGROUND OF INVENTION

[0002] The invention relates generally to using an offer matching systemto collect and to execute binding offers to buy and to sell a tradeditem. Existing offer matching systems typically operate in a manner thatallows a participant to receive fairly complete information about offerssubmitted by such participant and the status of such offers. Existingparticipant systems typically operate in a manner that allows a customerwho submits an order to a participant system to receive fairly completeinformation about offers submitted by such customer. However, existingoffer matching systems do not typically permit unknown persons toreceive detailed information about an offer.

[0003] Existing offer matching facilities typically include a centralcomputer (referred to herein as an offer matching system) that isprogrammed to accept offers from multiple remotely located participantsystems and to execute compatible buy and sell offers in accordance apredetermined set of rules. (By “execute” we mean give rise to a bindingobligation to clear and settle a trade.)

[0004] For example, an offer matching system for securities operated bya stock exchange that is organized as a not-for-profit memberorganization might include a central computer facility operated by thestock exchange organization (referred to herein as the offer matchingsystem) that communicates with multiple computer systems operated by itsmembers (referred to herein in as participant systems). As anotherexample, an alternative trading facility for securities operated by abroker-dealer might include a central computer system operated by thebroker-dealer (referred to herein as an offer matching system) thatcommunicates with multiple computer systems (referred to herein asparticipant systems) operated by clients of the broker dealer.

[0005] The term “offer matching system” is herein limited to systemswhere offers submitted by participants represent binding offers byparticipants to buy or to sell one or more traded items, subject topredetermined terms and conditions. Thus the present invention does notconcern so called “bulletin board systems” where participants can postnon-binding indications of interest in buying or selling one or moretraded items.

[0006] Existing offer matching systems operated by stock exchanges oftenpermit a few members, referred to as specialists, to submit quotationswhich are in effect offers to buy or to sell securities for the quotedprices. For purposes herein, such quotations from specialists areincluded within the term “offer”. Other existing offer matching systemspermit participating market makers to publish bid and ask quotationsthat the market makers are obligated to honor, subject to variouslimitations and exceptions. For purposes of this description, suchquotations from market makers are included within the term offer. offermatching systems often permit participants to submit offers to buy or tosell a specified quantity (or less) of a traded item at a specifiedprice (or better). Such offers are also included within the term “offer”as used herein.

[0007] Typically, if an existing offer matching system determines that aparticular offer is to be executed, then the participant that submittedsuch offer becomes legally bound to buy or to sell (as the case may be)a particular quantity of the relevant traded item for a particularprice, subject to predetermined terms and conditions applicable to theoperation of the offer matching system. For example, if a firstparticipant (for example a market maker) submitted to an offer matchingsystem a first offer to buy a large number of shares of Acme commonstock for $1.00 per share or better and a second participant (forexample, a broker forwarding an offer on behalf of a client) submittedto the offer matching system a second offer to sell 100 shares of Acmecommon stock for $1.00 per share or better, then the offer matchingsystem might determine that the first offer can be executed against thesecond offer for 100 shares at a price of $1.00 per share. In such acase, the first participant would become obligated to buy 100 shares ofAcme common for $1.00 per share and the second participant would becomeobligated to sell 100 shares of Acme common for $1.00 per share.

[0008] There are many different methods that might be used to consummatetrades once an offer matching system determines that particular offersare to be executed. In the case of the above example of a trade of 100shares of Acme common for $1.00 per share, the offer matching systemcould disclose to both the first participant and the second participantthe identity of the other, in which case the first participant and thesecond participant could clear and settle the trade directly with oneanother. As an alternative, all trades might occur with a singledesignated intermediary (such as a specialist in the case of a stockexchange or a sponsoring broker dealer in the case of an alternativetrading system). If a single designated intermediary were used, then thefirst participant would become obligated to buy 100 shares of Acmecommon from the designated intermediary, the designated intermediarywould become obligated to sell 100 shares of Acme common to the firstparticipant, the second participant would become obligated to sell 100shares of Acme common to the designated intermediary and the designatedintermediary would become obligated to buy 100 shares of Acme commonfrom the second participant—and there would be no need to reveal to thefirst participant the identity of the second participant, or vice versa.As used herein, the expression “execute one offer against another offer”includes both the case where the submitting participants becomeobligated to trade directly with one another and the case where thesubmitting participants become obligated to trade with one or moreintermediaries.

[0009] Existing offer matching systems typically include some facilityfor distributing information about outstanding offers and about tradesarising out of the execution of offers.

[0010] It is typical for such facilities to include:

[0011] Electronically publishing information about prices and/orquantities for offers currently active in the offer matching system.Such information might be limited to the current best priced buy andsell offers, or it might include information about several buy and selloffers. Often such information does not identify the persons responsiblefor a particular offer unless such persons are specialists or marketmakers.

[0012] Electronically publishing information about trades executed bythe offer matching system. Well known examples of this include stocktickers which publish for each trade the affected security, the quantitytraded and the price at which a trade occurred.

[0013] Permitting participant systems that have established a securecommunications link to obtain detailed information about offers forwhich the relevant participant is responsible.

SUMMARY OF INVENTION

[0014] In one embodiment of the invention, a method for interacting withan offer matching system comprises a number of operations. For example,a first participant may communicate to the offer matching system a firstdescription of a first offer. A first identifier is associated with thefirst offer and is not associated with any offer other than the firstoffer. (The first identifier may have been provided by the firstparticipant or may have been created by the offer matching system, forexample.) If the first participant did not already know of the firstidentifier, then the offer matching system communicates it to the firstparticipant. A second participant communicates to the offer matchingsystem a description of a second offer that is capable of being executedat least in part against the first offer in accordance with a set ofrules that govern the operation of the offer matching system. The firstparticipant then discloses the first identifier to a first disclosee.The first disclosee may then present a query to the order matchingsystem, containing among other things information indicative of thefirst identifier. In response to the first request, and without theoffer matching system's determining that the first request was made by aperson entitled to receive confidential information concerning the firstoffer, the offer matching system communicates to the first disclosee afirst data item concerning the first offer.

[0015] Another embodiment of the invention directs itself to the problemthat some firewall systems make it difficult or impossible for a serverand client to communicate in a secure way if default parameters areemployed. In a TCP/IP system, there are well-established port numbers.As a default, TCP port 80 is used for hypertext transfer protocol (http)communications. But in the Internet, one of the design assumptions isthat the communications links are insecure. This has prompteddevelopment of a secure http protocol (https) in which the client andserver establish “secure sockets” according to which they cancommunicate in relative security. As a default, TCP port 443 is used forthis purpose.

[0016] Designers of firewalls, however, often choose to block most TCPport numbers, permitting only a small handful of port numbers to beopen. Given the near-ubiquity of the Web's http servers, a firewalldesigner will almost always find a way to permit port 80 to be open. Butin many firewalled systems it turns out that the firewall designer hasnot permitted port 443 to be open. The result in practical terms is thata web user is unable to reach secure sites that use the https protocol.

[0017] In accordance with the invention, a method is provided forsecurely communicating with a server program using a secure hypertexttransfer protocol, the method comprising: (a) configuring the httpsserver program so that it listens for requests for secure hypertexttransfer protocol sessions on port 80 rather than port 443; (b)receiving at the server program on port 80 a first data packet in amanner that is consistent with the secure hypertext transfer protocol,except that the request is received on port 80 rather than port 443; and(c) outputting from the server program a response to the first datapacket in a manner that is consistent with the secure hypertext transferprotocol, except that the request was received on port 80 rather thanport 443.

[0018] In this way an entire https session can take place, mediated byport 80, and thus is permitted to be established and carried out even ifthe user (client) is located on a system having a firewall that blocksport 443.

BRIEF DESCRIPTION OF DRAWINGS

[0019] The invention will be described with respect to a diagram, ofwhich:

[0020]FIG. 1, parts a-i, shows parallel flowcharts that illustrate thetop level communications protocol used to implement the invention.

[0021]FIG. 2 shows in schematic form several communication links amongan offer matching system, a plurality of participant systems, aninformation publishing system, a disclosee system and a monitor system.

DETAILED DESCRIPTION

[0022]FIG. 2 shows in schematic form an offer matching system 2001communicatively coupled to a plurality of participant systems 2002, 2003and 2004, an information publishing system 2005, a disclosee system 2007and a monitor system 2006. FIG. 2 also shows communication links amongseveral of the other systems. In one embodiment of the invention, eachsystem is geographically remote from the other systems. It will beappreciated that in this context “publish” may mean “broadcast”.

[0023] Those skilled in the art will appreciate that:

[0024] although FIG. 2 depicts an example embodiment with a single offermatching system, the invention contemplates that multiple offer matchingsystems can be used (for example, different traded items could beallocated to different offer matching systems to improve performance),

[0025] although FIG. 2 depicts an example embodiment with only threeparticipant systems, the invention contemplates that the offer matchingsystem can be communicatively coupled with many participant systems (forexample, several broker dealer firms might each have a participantsystem or several traders at a single broker dealer firm might each havea participant system),

[0026] although FIG. 2 depicts an example embodiment with a singleinformation publishing system, the invention contemplates that the offermatching system can be communicatively coupled with many informationpublishing systems at the same time (for example, an informationpublishing system that publishes information using a proprietarynetwork, an information publishing system that publishes informationusing the Internet or an information publishing system that publishesinformation using radio frequency transmissions),

[0027] although FIG. 2 depicts an example embodiment with a singledisclosee system, the invention contemplates that the offer matchingsystem can be communicatively coupled with many disclosee systems at thesame time (for example, each of several individual investors couldoperate a disclosee system connected to the Internet to obtaininformation about the status of orders submitted to the offer matchingsystem), and

[0028] although FIG. 2 depicts an example embodiment with a singlemonitor system, the invention contemplates that the offer matchingsystem can be communicatively coupled with many monitor systems at thesame time (for example, monitor systems can be operated by clearingbrokers who clear and settle trades for various broker dealerparticipants, banks that lend money to broker dealer participants, andcompliance and risk management personnel who work for broker dealerparticipants).

[0029] In an exemplary embodiment of the invention, each of the offermatching system 2001 and the information publishing system is anInternational Business Machines Personal Computer compatible computersystem that utilizes the Microsoft Windows NT Server Version 4.0operating system, Microsoft SQL Server Version 6.5 and the followingitems from the Microsoft Windows NT 4.0 Option Pack: Certificate Server,FrontPage 98 Server Extensions, Internet Information Server Version 4.0,Microsoft Data Access Components 1.5, Microsoft Index server, MicrosoftManagement Console, NT Option Pack Common Files, Microsoft TransactionServer Version 2.0, and Windows Scripting Host.

[0030] In an exemplary embodiment of the invention, each of the firstparticipant system 2002, second participant system 2003, thirdparticipant system 2004, disclosee system 2006 and monitor system 2007is an International Business Machines Personal Computer compatiblecomputer system that utilizes the Microsoft Windows NT WorkstationVersion 4.0 operating system and Microsoft Internet Explorer version4.0.

[0031] Those skilled in the art will appreciate that two or more of thesystems depicted in FIG. 2 could be run on the same computer. In fact,for software development purposes, all of the systems depicted in FIG. 2can be run on a single general purpose stored program computer which hasbeen programmed appropriately.

[0032] In one embodiment of the invention, each of the systems depictedin FIG. 2 is connected to a single network (such as a local area networkor the Internet) that permits each of such systems to communicate withthe others. In an exemplary embodiment of the invention:

[0033] each of the participant systems and the information publishingsystem is communicatively coupled to the offer matching system using anetwork that is independent of the Internet, such as, but not limitedto, a network of leased lines, a private frame relay network, acontrolled access network that utilizes the Financial InformationExchange protocol, or using modems over the switched telephone network,and

[0034] each of the disclosee system and the monitor system iscommunicatively coupled to the other systems via the Internet using thesecure sockets layer protocol and a secure transfer protocol.

[0035] Those skilled in the art will appreciate that the communicationlinks among the systems depicted in FIG. 2 may be implemented using anycommunication technology that is used to communicate between computersystems, including, but not limited to: local area networks (including,but not limited to, local area networks implemented using ethernet,10BaseT, 100BaseTX, fiber optics, wireless radio frequency links,wireless infrared links, etc.) and wide area networks (including, butnot limited to, the switched telephone network, leased telephone lines,electronic mail, microwave links, frame relay networks, satellite datalinks, X.25 networks, fiber optic networks, etc.).

[0036]FIG. 1, parts a-i, are parallel flowcharts that illustrate anexemplary communications protocol that can be used to implement theinvention.

[0037] Those skilled in the art will appreciate that an offer matchingsystem normally will be configured by system operators and/orparticipants before it is used to match offers. The inventioncontemplates that configuration of the offer matching system willinclude configuration by operators of the system and by participants. Inparticular, the invention contemplates that: (a) employees of the firmthat operates the offer matching system will typically enter informationconcerning (i) traded items for which the offer matching system willaccept and match offers and (ii) participants who are permitted tosubmit binding offers to the offer matching system and (b) employees ofparticipants will typically enter information to configure processingoptions offered by the trading system. In an exemplary embodiment, afirst participant can communicate to the offer matching system a requestto store various associations, which the offer matching system willstore 1112 in a memory facility of the offer matching system.

[0038] In one embodiment of the invention, a participant or an operatorof the offer matching system can configure the offer matching system todisclose otherwise confidential information about an offer to a monitorin certain conditions by directing the offer matching system to store1112 an association among a first target (e.g., the individual or entityto be monitored), a first monitor (e.g., the individual or entity towhich extra information will be disclosed) and a first condition (e.g.,the condition that must be satisfied by an offer before extrainformation about it can be disclosed to the first monitor). The firstcondition can include, without limitation, requirements such as thefollowing:

[0039] an offer is for the benefit of the first target (for example, andnot by way of limitation, (i) if the target were an investor and themonitor were that investor, then that investor could receiveconfidential information about offers submitted by participants actingas such investor's broker, (ii) if the target were a participant and themonitor were a clearing broker who clears and settles trades for suchparticipant, then such clearing broker could receive confidentialinformation about offers where such participant is acting as aprincipal), an offer is for the account of the first target,

[0040] the first target made an investment decision to make an offer(e.g., but not by way of limitation, compliance or risk managementpersonnel of a participant could be permitted to receive confidentialinformation about offers that arise out of an investment decision by aparticular individual),

[0041] the first target has a financial interest in an offer,

[0042] the first target is financially responsible (as principal,guarantor or otherwise) for an offer (for example, and not by way oflimitation, if the first target were a participant and the first monitorwere a bank that loans money to such participant, then such bank couldreceive confidential information about offers for which such participantis financially responsible),

[0043] the first target is financially responsible (as principal,guarantor or otherwise) for a trade arising out of an offer,

[0044] the first target is acting as an agent with respect to an offer,and

[0045] the first target is acting as a principal with respect to anoffer.

[0046] In one embodiment of the invention, a participant or an operatorof the offer matching system can configure the offer matching system todirect that an offer submitted by a first participant will not beexecuted unless and until a second person approves such offer. In anexemplary embodiment, the offer matching system can be configured bydirecting the offer matching system to store 1112 an association among afirst participant (e.g., the participant whose offers must be approved)and a first monitor (e.g., the individual or entity that must approveoffers received from the first participant).

[0047] Those skilled in the art will appreciate that the inventioncontemplates that the offer matching system will be configured inseveral other ways that are typical of offer matching systems.

[0048] An investor who wishes to utilize the offer matching system ofthe invention can send 1101 a description 1151 of a first offer from adisclosee system 2006 operated by the investor to a first participantsystem operated by a participant. In an exemplary embodiment, theinvestor uses a web browser (such as Microsoft Internet Explorer) andsecure sockets layer running on the disclosee system to communicate viathe Internet with a site on the world wide web that is operated by aregistered securities broker that accepts from the investor a bindingoffer (often referred to as a limit order) to buy or to sell a specifiedquantity of a specified security for a specified price or better. Thoseskilled in the art will appreciate that the communication of adescription of the first offer from the investor and the broker can beaccomplished in many other ways, including, but not limited, the FIXprotocol, by fax, orally, etc. Those skilled in the art will appreciatethat the format and contents of the first description 1151 of the firstoffer can vary greatly while still accomplishing the basic task ofcommunicating a description of the first offer. The invention permitsinvestors to submit orders to brokers and dealers by whatever mechanismsthey currently use to submit such orders, except that (i) in anexemplary embodiment, each offer submitted by an investor is a limitorder and (ii) in an exemplary embodiment, the communication between theinvestor and the broker dealer is augmented so that an order identifierassociated with the order can be communicated between the investor andthe broker.

[0049] A first participant system 2002 operated by a participant canutilize the services of the offer matching system in two primary ways:acting as a broker (i.e., acting as an agent for a client) or acting asa dealer (i.e., acting as a principal). When the first participant actsas a broker, the first participant system can receive 1102 a firstdescription 1151 of a first offer from a first disclosee system 2007operated by an investor. When acting as a dealer (i.e., when acting forthe first participant's own account), the first participant system canreceive or generate a description of a desired offer by any means thatthe first participant might desire.

[0050] Once a description of a desired first offer is stored in thefirst participant system 2002 (regardless of whether the firstparticipant is acting as a broker for an offer received from a client oris acting as a dealer for an offer for the first participant's ownaccount), the first participant can send 1103 a description 1152 of thefirst offer to the offer matching system 2001. In an exemplaryembodiment, the description of the first offer sent from the firstparticipant to the offer matching system will contain the informationabout the first offer supplied by the disclosee and will also containadditional information supplied by the first participant. In anexemplary embodiment, the description received 1104 by the offermatching system 2001 can include, without limitation:

[0051] a password and other information relevant to confirming whosubmitted the first offer and that the first offer has not been modifiedduring transmission

[0052] an identifier for the first offer,

[0053] an identifier for an order replaced by the first offer,

[0054] an indication of whether the participant claims to be acting as aprincipal (i.e., dealer) or as an agent (i.e., broker) with respect tothe first offer,

[0055] an indication of whether the first offer may be executed in partwithout being executed in full,

[0056] a time by which the first offer must be approved to avoidautomatic cancellation,

[0057] an indication of whether the first offer is an offer to buy or anoffer to sell,

[0058] information that identifies one or more circumstances in whichthe offer matching system should automatically cancel the first offer,

[0059] information about how any trades arising out of the first offerare to be cleared and settled,

[0060] a time before which the offer ought not be executed,

[0061] a time at which the first offer is scheduled to expire,

[0062] an indication of how often the offer matching system may attemptto execute the first offer,

[0063] information that identifies a circumstance in which the offermatching system may automatically adjust the quantity or price of thefirst offer,

[0064] a time when the first offer was initiated,

[0065] an indication of who initiated the first offer,

[0066] an indication of whether the first offer was submitted by or onbehalf of a participant or member in the offer matching system,

[0067] an indication of whether any odd lot portion of the first offermay be executed in part without being executed in whole,

[0068] an indication of whether any round lot portion of the first offermay be broken into odd lots,

[0069] an indication of whether any odd lot portion of the first offermay be executed at a price that is not the same as a price at which around lot has executed,

[0070] an indication of whether the first offer was submitted by or onbehalf of an issuer of the applicable traded item,

[0071] an indication of whether the first offer is a stabilizing offer,

[0072] a limit price for the first offer below or above which it can notbe executed,

[0073] an indication that the first offer may be executed at a marketprice,

[0074] an indication that the first offer may be executed at a closingprice,

[0075] an initial quantity for the first offer,

[0076] a time when the first offer was first received by the firstparticipant,

[0077] a time when a description of the first offer was first receivedby the offer matching system,

[0078] an indication of who at the participant first received the firstoffer,

[0079] an indication of how the first offer was generated,

[0080] an indication of the traded item to which the first offerrelates,

[0081] if the offer is an offer to sell, an indication of whether theoffer is long, short or short exempt, and

[0082] an indication of whether the offer was solicited by the firstparticipant.

[0083] Those skilled in the art will appreciate that there are manydifferent ways to associate 1105 a first offer and a first identifier.For example, and not by way of limitation:

[0084] the disclosee can generate a proposed identifier that is includedin a first description 1151 communicated 1101, 1102 to a firstparticipant, the first participant can include the proposed identifier(or a second proposed identifier derived therefrom) in the description1152 communicated 1103,1104 to the offer matching system, and the offermatching system can store in its memory an association between the firstoffer and the proposed identifier received from the first participant;

[0085] the disclosee can obtain from the offer matching system a uniqueidentifier that is then communicated from the disclosee to the firstparticipant to the offer matching system;

[0086] the first participant can generate a proposed identifier that thefirst participant then communicates 1103, 1104 to the offer matchingsystem and communicates 1108, 1109 to the disclosee;

[0087] the first participant can obtain from the offer matching systeman identifier that the first participant then communicates 1103, 1104 tothe offer matching system and communicates 1108, 1109 to the disclosee;and

[0088] in an exemplary embodiment, after receiving a description of theoffer, the offer matching system can generate a first identifier, storean association between the first identifier and the first offer in thememory of the offer matching system, and communicate 1106, 1107 thefirst identifier 1153 to a first participant which then communicates1108, 1109 the first identifier 1154 to a first disclosee.

[0089] If a system other than the offer matching system (e.g., aparticipant system, disclosee system or monitor system) proposes that aparticular identifier be associated with the first offer, then the offermatching system must confirm that the proposed identifier is not alreadyassociated with another offer. If a proposed identifier is alreadyassociated with another offer, then the offer matching system couldeither reject the offer or accept the offer but associate a differentidentifier. In an exemplary embodiment, the offer matching systemgenerates the first identifier and communicates 1106, 1107 the firstidentifier 1153 to the first participant. The present invention is notlimited to any particular method for the first offer with a firstidentifier.

[0090] In an exemplary embodiment of the invention, once the offermatching system has received a first description of a first offer andassociated a first identifier with the first offer, then the rules forthe offer matching system, and the offer matching system, will permitinformation, including, but not limited to the following, to be publiclydisclosed about the first offer:

[0091] an indication of whether the first offer is an All Or None offer(i.e., an indication of whether the first offer must be executed in fullor not at all),

[0092] an indication of whether the offer is an offer to buy or an offerto sell,

[0093] an indication of whether the offer should be automaticallycanceled in various circumstances,

[0094] a time before which the first offer ought not be executed,

[0095] if the first offer has become capable of execution, an effectivetime as of which the first offer first became capable of execution,

[0096] an expiration time after which the first offer ought not beexecuted,

[0097] if defined, a finish time as of which the first offer firstbecame incapable of execution,

[0098] if defined, a finish type that indicates why the first offerfirst became incapable of execution,

[0099] an indication of whether the first offer is an Immediate OrCancel offer, for which any unexecuted portion will be canceledimmediately after the offer matching system first attempts to executethe first offer,

[0100] information that identifies a circumstance in which the offermatching system may automatically adjust the quantity or price of thefirst offer,

[0101] an indication of whether the first offer was submitted on behalfof a participant or member in the offer matching system,

[0102] an indication of whether an odd lot portion of the first offermay be executed in part without being executed in whole,

[0103] an indication of whether a round lot portion of the first offermay be broken into odd lots,

[0104] an indication of whether an odd lot portion of the first offermay be executed at a price that is not the same as a price at which around lot has executed (i.e., that odd lot portions may execute a pricesthat are different from the prices at which round lots are executed),

[0105] a unique identifier associated with the first offer,

[0106] an identifier for an order replaced by the first offer,

[0107] a time by which the first offer must be approved to avoidautomatic cancellation,

[0108] a limit price for the first offer below or above which it can notbe executed,

[0109] an initial quantity for the first offer,

[0110] a remaining quantity for the first offer,

[0111] a time when a description of the first offer was first receivedby the offer matching system,

[0112] an indication of how the first offer was generated (e.g.,computer generated program trades),

[0113] an indication of the traded item to which the first offerrelates,

[0114] if the offer is an offer to sell, an indication of whether theoffer is long, short or short but exempt from the special rules forshort sales;

[0115] except that:

[0116] if the first offer is an immediate or cancel offer, the limitprice, initial quantity and remaining quantity will not be disclosedpublicly (although information about the quantity and price of tradesarising out of such an offer will be publicly disclosed) and

[0117] if the first offer must be approved before it can be executed,then the offer matching system generally will not publicly disclose anyinformation about the first offer until it has been approved.

[0118] In an exemplary embodiment, once the offer matching system hasreceived a description of a first offer that is associated with a firstidentifier, the offer matching system will send 1401 to an informationpublisher a description 1451 of the first offer that includes the firstidentifier and the information about the first offer that the offermatching system is permitted to disclose publicly.

[0119] Once the offer matching system has received descriptions ofseveral offers, then based upon a first description 1152 of a firstoffer received 1104 by the offer matching system, the offer matchingsystem can select 1110 a different offer that is related in some usefulway to the first offer. For example, but not by way of limitation, theoffer matching system could select an offer because it satisfies acondition that includes one or more of the following requirements:

[0120] that the first offer executed at least in part against suchoffer,

[0121] that both the first offer and such offer are for the same tradeditem,

[0122] that both the first offer and such offer are for the same tradeditem and for the same side (i.e., both are buy offers or both are selloffers),

[0123] that both the first offer and such offer are for the same tradeditem, but the first offer and such offer are for opposite sides (i.e.,one is an offer to buy and the other is an offer to sell),

[0124] that at a time when the first offer was capable of execution,such offer executed in whole or in part against a different offer, and

[0125] that at a first time when the first offer was capable ofexecution:

[0126] such offer executed in whole or in part against a different offerand

[0127] the first offer could have executed in whole or in part againstsuch different offer in accordance with the set of rules for the offermatching system if the offer matching system had not possessedinformation concerning any other offers for a same side as the firstoffer.

[0128] The condition used to select such offer could include otherrequirements that are not listed above, such as, for example, arequirement that the selected offer be capable of being executed inwhole or in part at a specified time.

[0129] A second participant can use a second participant system 2003 tocommunicate 1201, 1202 a description 1251 of a second offer to the offermatching system.

[0130] The offer matching system can execute 1203 the first offeragainst the second offer in accordance with a set of rules for the offermatching system. Those skilled in the art will appreciate that there aremany different ways that an offer matching system can match and executeoffers to buy and to sell. The invention is not limited to a particularmethod for matching and executing offers in the offer matching system.

[0131] In an exemplary embodiment, once the offer matching systemexecutes a first buy offer against a first sell offer, then the rulesfor the offer matching system, and the offer matching system, willpermit information, including, but not limited to the following, to bepublicly disclosed about each trade arising out of such execution:

[0132] a unique identifier associated with the first buy offer,

[0133] the price at which the trade occurred,

[0134] the quantity traded,

[0135] an indication of the applicable traded item,

[0136] a unique identifier associated with the first sell offer,

[0137] a unique identifier associated with such trade, and

[0138] the time at which the trade occurred.

[0139] In an exemplary embodiment, once the offer matching systemexecutes a first buy offer against a first sell offer, then the offermatching system will send 1401 to an information publishing system 2005a description of the resulting trade that includes the information aboutthe trade that the offer matching system is permitted to disclosepublicly.

[0140] Someone, including, but not limited to a disclosee orparticipant, who originates or communicates a description of a firstoffer may also know one or more of the following:

[0141] what identifier is associated with the first offer,

[0142] who has a beneficial interest in the first offer,

[0143] for whose account the first offer was submitted,

[0144] who made the decision to make the first offer,

[0145] who has a financial interest in the first offer,

[0146] who is financially responsible (as principal, guarantor orotherwise) for the first offer,

[0147] who is financially responsible (as principal, guarantor orotherwise) for a trade arising out of the first offer,

[0148] who, if anyone, is acting as an agent with respect to the firstoffer, and

[0149] who, if anyone, is acting as a principal with respect to thefirst offer.

[0150] If a person, including, but not limited to a disclosee orparticipant, possesses information that discloses what identifier isassociated with the first offer and discloses any one or more of thefollowing:

[0151] who has a beneficial interest in the first offer,

[0152] for whose account the first offer was submitted,

[0153] who made the decision to make the first offer,

[0154] who has a financial interest in the first offer,

[0155] who is financially responsible (as principal, guarantor orotherwise) for the first offer,

[0156] who is financially responsible (as principal, guarantor orotherwise) for a trade arising out of the first offer,

[0157] who, if anyone, is acting as an agent with respect to the firstoffer, and

[0158] who, if anyone, is acting as a principal with respect to thefirst offer,

[0159] then such person may confidentially communicate the firstidentifier to any other person (including, but not limited to, aparticipant, a disclosee or a monitor) in a way that discloses suchinformation to such other person.

[0160] Thus, it is possible for any particular person to knowinformation which discloses that a particular identifier is associatedwith an order for which some person is in a specified relationship, evenif such information has not been publicly disclosed.

[0161] If the disclosee possesses information which discloses that afirst related person is related in a particular way to an offer that isassociated with the first identifier, then the disclosee can communicate1211, 1212 the first identifier 1255 to a monitor in a manner thatdiscloses that the first related person is so related to an offerassociated with the first identifier. For example, but not by way oflimitation, if the first disclosee were the treasurer of an investmentclub and the first offer were an offer submitted for the benefit of theinvestment club, the first disclosee could tell another member of theclub (i.e., the monitor) that the offer associated with the firstidentifier was submitted on behalf of the club.

[0162] Once a person (including, but not limited to a participant,disclosee or monitor) knows that a first identifier is associated withan offer that is of interest to such person, then such person can obtaininformation about the offer associated with the first identifier inseveral different ways.

[0163] A participant can communicate 1206, 1207 to the offer matchingsystem a request 1253 for information keyed to the first identifier.After receiving 1207 such a request, the offer matching system cancommunicate 1209, 1210 the desired information 1254 to the participant.The request 1253 from the participant can specify that a response shouldonly be made after some specified event has occurred. For example, butnot by way of limitation, the response might be delayed until:

[0164] some data item associated with the first offer changes,

[0165] the first offer is modified,

[0166] the first offer is cancelled,

[0167] the first offer expires, or

[0168] the first offer is executed by the offer matching system at leastin part.

[0169] For example, but not by way of limitation, the informationrequested might include information (a first data item) about a thirdoffer selected 1110 based upon information about the first offer. Thefirst data item may contain information that was communicated to theoffer matching system when a description of the third offer was firstcommunicated to the offer matching system; or the first data item mayconcern an offer against which the third offer was executed at least inpart; or the first data item may identify an offer against which thethird offer was executed at least in part; or the first data item mayidentify a transaction report for a trade in which the third offer wasexecuted at least in part.

[0170] In one embodiment of the invention:

[0171] a first offer is associated with a first identifier,

[0172] a first requester (including, but not limited to a participant,disclosee or monitor) either possesses or obtains (from a participant,disclosee, monitor or other person) information which discloses that thefirst identifier is associated with the first offer and that a firstrelated person satisfies a first condition selected from the groupconsisting of:

[0173] the first offer is for the benefit of the first related person,

[0174] the first offer is for the account of the first related person,

[0175] the first related person made an investment decision to make thefirst offer,

[0176] the first related person has a financial interest in the firstoffer,

[0177] the first related person is financially responsible (asprincipal, guarantor or otherwise) for the first offer,

[0178] the first related person is financially responsible (asprincipal, guarantor or otherwise) for a trade arising out of the firstoffer,

[0179] the first related person is acting as an agent with respect tothe first offer, and

[0180] the first related person is acting as a principal with respect tothe first offer.

[0181] The first requester sends 1206, 1301, 1306, 1405, 1501, 1506 afirst request 1253, 1351, 1353, 1453, 1551, 1553 that includes the firstidentifier to an offer matching system or to an information publishingsystem. If the first request indicates that the first requester wishesto be notified when a first event occurs, then the offer matching systemor information publisher, as the case may be, waits 1208, 1303, 1308,1407, 1503, 1508 for the first event to occur, without determining thatthe first request was made by a person entitled to receive confidentialinformation concerning the first offer, the offer matching system orinformation publishing system, as the case may be, sends 1209, 1215,1304, 1309, 1408, 1504, 1509 and the first requester receives 1210,1216, 1305, 1310, 1409, 1505, 1510 a response 1254, 1257, 1352, 1354,1454, 1552, 1554 that includes a first data item which concerns thefirst offer and is responsive to the first request, whereby, the firstrequester, which already possesses information which discloses that thefirst related person satisfies the first condition, gains possession ofinformation which discloses that the first data item concerns the firstoffer.

[0182] In another embodiment of the invention, a first offer isassociated with a first identifier,

[0183] a first requester (including, but not limited to a participant,disclosee or monitor) either possesses or obtains (from a participant,disclosee, monitor or other person) information which discloses that thefirst identifier is associated with the first offer and that a firstrelated person satisfies a first condition selected from the groupconsisting of:

[0184] the first offer is for the benefit of the first related person,

[0185] the first offer is for the account of the first related person,

[0186] the first related person made an investment decision to make thefirst offer,

[0187] the first related person has a financial interest in the firstoffer,

[0188] the first related person is financially responsible (asprincipal, guarantor or otherwise) for the first offer,

[0189] the first related person is financially responsible (asprincipal, guarantor or otherwise) for a trade arising out of the firstoffer,

[0190] the first related person is acting as an agent with respect tothe first offer, and

[0191] the first related person is acting as a principal with respect tothe first offer.

[0192] The first requester then sends 1206, 1301, 1306, 1405, 1551, 1553a first request 1253, 1351, 1353, 1453, 1501, 1506 that includes thefirst identifier to an offer matching system or to an informationpublishing system. Based upon information about the first offerpossessed by the offer matching system or the information publishingsystem, as the case may be, the offer matching system or the informationpublishing system selects a third offer that satisfies a secondcondition, the second condition comprising a requirement selected fromthe group consisting of:

[0193] that the first offer executed at least in part against the thirdoffer,

[0194] that both the first offer and the third offer are for a singletraded item,

[0195] that both the first offer and the third offer are for a singletraded item and a side,

[0196] that both the first offer and the third offer are for a singletraded item, the first offer is for a first side and the third offer isnot for the first side,

[0197] that at a time when the first offer was capable of execution, thethird offer executed in whole or in part against a third offer, whereinthe third offer is not the first offer, and

[0198] that at a first time when the first offer was capable ofexecution:

[0199] the third offer executed in whole or in part against a fourthoffer, wherein the fourth offer is not the first offer, or

[0200] the first offer could have executed in whole or in part againstthe fourth offer in accordance with the set of rules if the offermatching system had not possessed information concerning any otheroffers for a same side as the first offer.

[0201] If the first request indicates that the first requester wishes tobe notified when a first event occurs, then the offer matching system orinformation publisher, as the case may be, waits 1208, 1303, 1308, 1407,1503, 1508 for the first event to occur.

[0202] Without determining that the first request was made by a personentitled to receive confidential information concerning the third offer,the offer matching system or information publishing system, as the casemay be, sends 1209, 1215, 1304, 1309, 1408, 1504, 1509 and the firstrequester receives 1210, 1216, 1305, 1310, 1409, 1505, 1510 a response1254, 1257, 1352, 1354, 1454, 1552, 1554 that includes a first data itemwhich concerns the third offer and is responsive to the first request.

[0203] In this way, the first requester, which already possessesinformation which discloses that the first related person satisfies thefirst condition, gains possession of information which discloses thatthe first data item concerns the third offer which satisfies the secondcondition.

[0204] It will be appreciated that in accordance with the invention,reports could be sent to the investor, to someone tracking theinvestor's credit and risk exposure, or to each member of an investmentclub. Such reports' use would depend upon knowledge of the relationshipbetween an identifier and its respective offer.

[0205] The present invention allows an investor conveniently to monitorhow quickly and accurately the investor's broker processes an offerinitiated by the investor. For example, the investor (the disclosee) cansend a description of the offer to the investor's broker (theparticipant) who forwards a description of the offer to an offermatching system. The offer matching system associates an offeridentifier with the offer and communicates the offer identifier to theinvestor's broker. The investor's broker then communicates the offeridentifier to the investor. Once the investor knows the offer identifierassociated with the offer, the investor can visit a web site operated bythe offer matching system or by an information publisher that obtainsinformation from the offer matching system and ask for information basedupon the offer identifier. For example, if the investor asks the offermatching system or an information publisher for a description of theoffer associated with the offer identifier, the investor could find outwhen the offer was received by the offer matching system and the priceand quantity that were specified in the description received by theoffer matching system. Thus the investor could monitor how quickly theinvestor's broker submitted the investor's order to the offer matchingsystem and could confirm that the investor's broker submitted thecorrect price and quantity. Although anyone could query the offermatching system or the information publisher using the offer identifier,only a few people would know that the investor has any interest in theoffer associated with the offer identifier.

[0206] The present invention also allows an investor conveniently tomonitor the status of an offer initiated by the investor. Once theinvestor knows the offer identifier associated with the investor'soffer, the investor can visit a web site operated by the offer matchingsystem or an information publisher and ask to receive an e-mail noticeeach time the offer is executed in whole or in part. Although anyonecould ask to receive notices when such offer executes, only a few peoplewould know that trades described in such notices are financiallyrelevant to the investor. The present invention allows the investor toobtain such notices without requiring the investor to use a broker thatoperates a system for providing such notices.

[0207] The present invention also allows an investor to permit othersconveniently to monitor the status of an offer initiated by theinvestor. For example, the treasurer of an investment club could submitan offer as described above, and then send to each member of theinvestment club an e-mail that contains the offer identifier. Eachmember of the investment club could then obtain information about theoffer and executions of the offer by directly querying the offermatching system or an information publisher.

[0208] The present invention permits an investor to obtain informationabout other offers that are related in some interesting way to an offerinitiated by the investor. Consider, for example, an investor whoobserves on a ticker-type display that trades for a stock he wants tobuy are occurring at prices below the limit price specified in a buyoffer previously submitted to the offer matching system. The investorwill want to know why his offer has not yet executed. In such a case,the investor could visit a web site operated by the offer matchingsystem or an information publisher, supply the offer identifier for theinvestor's buy offer, and ask for information about trades of therelevant stock that have occurred at prices below the limit pricespecified in his order. The offer matching system or informationpublisher could then list such trades and explain why the buy offersinvolved in those trades had priority over the investor's buy order(e.g., the other offers specified a higher limit price, were submittedsooner, were for a larger initial quantity, etc.—whatever factor gavethem a higher execution priority). The investor might also want to knowabout active buy offers that have an execution priority that is higherthan the investor's buy offer (i.e., offers that must be filled beforethe investor's offer can be executed). Once again, given the offeridentifier for the investor's buy offer, the offer matching system orinformation publisher could provide information about prices andquantities specified in higher priority offers for the same security.

[0209] The present invention permits a participant to obtain informationabout other offers that are related in some interesting way to an offersubmitted to the offer matching system by the participant. Inessentially the same way that an investor who knows an offer identifiercan obtain information about other offers with higher executionpriority, a participant can obtain the same information.

[0210] The present invention permits a bank to monitor a borrower's riskexposure arising out of offers submitted to an offer matching system.For example, a bank (the monitor) that wants to track a borrower's (thedisclosee's) risk exposure arising from offers submitted to the offermatching system, could refuse to lend to the borrower until the borrowercauses the borrower's broker (the participant) to cause the offermatching system to save an association among the bank, the borrower andthe condition that the borrower is financially responsible for an offer.The bank and the offer matching system would also agree upon a procedureby which the bank could identify itself to the offer matching system.Subsequently, the borrower sends a description of an offer to theborrower's broker who forwards it to the offer matching system togetherwith information that the offer is for the account of the borrower. Theoffer matching system detects that the offer satisfies the condition. Ifthe bank logs onto the offer matching system in a way that permits theoffer matching system to recognize the bank and the bank submits arequest for information about offers for which the borrower isfinancially responsible, the exchange can then provide the requestedinformation to the bank. Thus the invention permits the bank to obtaininformation relevant to evaluating risks to which the borrower isexposed.

[0211] In a related embodiment of the invention there would be no needto submit a request. Instead, the offer matching system simply sends tothe bank information about offers submitted for the borrower's account.

[0212] The present invention also permits an investor (the disclosee) toobtain through the investor's broker (the participant) informationconcerning an offer that is digitally signed by an offer matchingsystem. Consider for example a case where the investor communicates anoffer to the investor's broker who then communicates it to the offermatching system. Subsequently, the investor can ask the broker forinformation about when the offer was received by the offer matchingsystem. The investor can ask the offer matching system for the desiredinformation. The offer matching system can provide the desiredinformation (either directly to the investor or to the broker who canforward it to the investor) and provide a digital signature whichcertifies that the information was provided by the offer matchingsystem. Thus, the invention permits the investor to monitor theperformance of the investor's broker with respect to offers forwarded tothe offer matching system without requiring the investor to communicatedirectly with the offer matching system.

[0213] The present invention permits an offer matching system to respondto queries about offers previously received by the offer matching systemwithout requiring the offer matching system to know or to verify theidentify of the individual making the query. Because the offer matchingsystem does not provide information that discloses who submitted aparticular order, providing information about an offer does not violatethe privacy expectations of an investor. An investor need only takereasonable steps to preserve the confidentiality of informationdisclosing which offer identifiers are associated with offers in whichthe investor has a financial interest. The investor does not even needto identify itself to the offer matching system to obtain informationabout the investor's own offers.

[0214] The present invention permits an offer matching system to respondto queries about offers that are somehow relevant to an offer identifiedby the person requesting information.

[0215] The present invention permits an information publisher to provideand pay for the facilities that permit investors and others to obtaininformation about offers received and processed by the offer matchingsystem.

[0216] The information publisher could charge investors for providingsuch a service or could charge for advertisements that are displayed topersons who obtain such information.

[0217] The invention permits an information publisher to provide and payfor the facilities that respond to queries for information about offersthat are somehow relevant to an offer that is of interest to an investoror any other person.

[0218] Several different communications technologies (including, but notlimited to ADSL, cable modems, broadcast media such as radio andtelevision, Internet multicasting, etc.) permit the very efficientdistribution of information from a single source to multiple recipients.The invention allows such technologies to be utilized to distributeinformation about offers and trades that is tagged with relevant offeridentifiers. Persons receiving such broadcasts can then filter thereceived information based upon offer identifiers to identifyinformation that is of interest to the recipient.

[0219] The problem with existing methods for distributing informationabout offers and trades is that they either require secure communicationlinks so that the offer matching system can confirm that the recipientis entitled to receive requested information or they publish informationthat is not tagged with offer identifiers so that a recipient can not besure that any particular item of information concerns an offer that isof interest to the recipient. A recipient using a prior system might,for example, see that someone just bought 100 shares of Acme common fora price that is compatible with his or her offer, but would not know ifthat trade represents an execution of his or her offer or an executionof some other offer that was submitted before his or her offer.

[0220] The invention permits an investor to obtain information about anoffer initiated by the investor by filtering data published by an offermatching system or an information publisher. For example, an investor(the disclosee) submits an offer to the investor's broker (theparticipant) who forwards the offer to the offer matching system. Theoffer matching system associates an identifier with the offer and theidentifier is communicated from the offer matching system to the brokerto the investor. The offer matching system, or an information publisherthat receives data tagged with offer identifiers from the offer matchingsystem, then publishes the offer identifier together with data about theoffer. Such information could be provided either only to subscribers orcould be broadcast to the public. The offer matching system orinformation publisher could publish similar information about manydifferent offers. The investor can then receive the publishedinformation and filter it for information that is tagged with the offeridentifier. Thus, the invention permits an investor (or anyone to whomthe investor discloses the relevant offer identifier) to obtaininformation about orders that are of interest to the investor (or suchperson) without sending a request for information to the offer matchingsystem or an information publisher and without revealing to anyone thatthe recipient is interested in a particular offer.

[0221] The invention permits an investor to obtain information aboutoffers that are related in an interesting way to an offer initiated bythe investor. For example, the investor (the disclosee) submits a firstbuy offer for a traded item to the investor's broker (the participant)who forwards the first buy offer to the offer matching system. Anidentifier associated with the first offer is communicated to theinvestor. The offer matching system or an information publishing systemsubsequently publishes information about other offers to buy the sametraded item. The investor's computer receives such information andstores it because it concerns a security that the investor wishes tobuy. The offer matching system or an information publishing system thenpublishes information about trades involving the security that theinvestor wants to buy at prices that are below the maximum price thatthe investor is willing to pay. The information about such tradesincludes offer identifiers for the buy offers involved in such trades(which are not the same as the offer identifier for the first offer).The investor's computer can see the offer identifier of the buy offerinvolved in such a trade, can retrieve previously stored informationabout such offer and can display for the investor a notice that suchtrade occurred and information about such offer so that the investor cansee why the other offer was executed before the investor's buy offer wasexecuted.

[0222] The invention permits the offer matching system to publish dataabout offers in a manner that does not require the offer matching systemto respond to multiple queries from the public because the public cansimply filter information published once by the offer matching system.This saves communication bandwidth.

[0223] The invention permits an investor to know whether a particulartrade reported by a ticker service did or did not arise out of an offeroriginated by the investor. An investor who knows that a first offeridentifier is associated with an offer initiated by the investor canmonitor ticker data that is tagged with the offer identifier of each buyoffer and sell offer that is involved in a reported trade. If data abouta trade is tagged with the first offer identifier, then the investorknows that the data concerns a trade arising out of the offer initiatedby the investor. Otherwise, the investor knows that the data concerns atrade that did not arise out of the offer initiated by the investor.

[0224] Those skilled in the art will realize that the invention thuspermits efficient communication to multiple investors of informationthat is of particular interest to them without requiring multiple securedata connections and the overhead of multiple queries.

[0225] The invention permits an investor to signal to the market thatthe decision to initiate an offer was not based upon information thathas not yet become widely known by investors. For example, an investorwho wishes to sell a block of a thinly traded stock to fund the purchaseof a new home, could submit an offer to sell the block at an attractiveprice with the stipulation that the offer could not be executed forseveral days. In such a scenario, other persons interested in theaffected security will have several days to adjust to the idea thatsomeone (whose identity is not revealed) wishes to sell the block ofstock. By the time the investor's sell offer becomes effective, otherinvestors will have had time to realize that the investor probably isnot trading based upon superior information because the investorannounced his intention to trade several days before the trade willactually occur. Also, persons with an interest in purchasing theaffected security will have had several days to realize that a large,attractively priced block is going to become available for purchase atthe delayed effective time specified by the investor.

[0226] The invention permits anyone who is willing to deal with a largenumber of small trades to obtain any price differential that might existbetween round lots and odd lots. For example, a patient seller withefficient systems for processing trades might wish to submit a largeoffer to sell at a high price that is marked to indicate that the selleris willing to permit round lots to be broken into odd lots. If personswho wish to purchase odd lots of the relevant security should indicate awillingness to pay a somewhat high price to obtain the desired odd lot,then it might be possible for the patient seller to sell at the highprices that odd lot purchasers are willing to pay.

[0227] The invention thus permits competition for odd lot trades in thehopes of inducing competition for odd lot trades that may result insmall spreads between the prices for odd lot trades and for round lottrades.

[0228] The invention permits a participant to reduce the risk thatcompromising physical security of a single computer system could exposethe participant to large risks. If the systems that are authorized toapprove offers are located remotely from the computers that are used tosubmit offers to the offer matching system, then it would be possiblefor the approving system to refuse to approve unusual offers that mightbe submitted by someone who wrongfully takes control of the submittingcomputers. The invention would also permit risk management or compliancepersonnel at a participant to block prohibited offers that otherpersonnel at the participant might submit to the offer matching system.

[0229] The invention attempts to reduce price volatility in the mannerthat it selects a trade price. Consider the case where a buyer with astrong desire to purchase Acme common submits a buy order that specifiesa limit price that is well above the last trade price and a seller witha strong desire to sell Acme common submits a sell order that specifiesa limit price that is well below the last trade price. When the offermatching system detects that these two offers can be executed againstone another, it must select a price at which the trade will be executed.According to the invention, the offer matching system will select aprice that is indicative of recent trading activity in the applicablesecurity, which should tend to reduce unnecessary price movements. Thus,the enthusiastic buyer who is willing to pay a high price will only needto pay a market-related price and the rushed seller who is willing toaccept a low price will actually receive a market-related price.

[0230] The invention permits a short seller to enter a single limitoffer that specifies the lowest price the short seller is willing toaccept, even if that price is (or becomes) less than the minimum pricepermitted for short sales. Each time the offer matching system examinesthe single limit offer to see whether it can be executed, the offermatching system will treat the single limit offer as though it were anoffer at the greater of the specified limit price and the minimum pricepermitted for short sales. This can reduce the number of times that ashort seller might adjust an offer to sell short to reflect tradingactivity that changes the minimum price permitted for short sales.

[0231] The majority of securities transactions in the US are clearedand/or settled through the facilities of a nonprofit membershiporganization named the National Securities Clearing Corporation(“NSCC”). For trades that clear and/or settle through its facilities,NSCC typically charges a per transaction fee that is independent of thenumber of shares or the dollar amount involved in the trade. If tradesarising out of an offer matching system are cleared and settled directlybetween the participants who submit offers to the offer matching system,then the allocation of NSCC fees can present some interesting problems.There is not a similar problem for offer matching systems where alltrades are executed with a single designated intermediary, because insuch a case all trades arising out of a single offer can be aggregatedinto a single trade with the designated intermediary. For example,consider the case where a first participant submits an offer to sell1000 shares that executes against 10 different offers to purchase 100shares. In such a case, the seller will be involved in 10 trades andeach buyer will be involved in a single trade. It would be undesirablefor the seller to pay more fees to NSCC than the buyers do because theseller would have been willing (and probably would have preferred) to doa single trade for the full 1000 shares. The invention proposes a methodfor collecting fees from each participant that benefits by having atleast part of an offer executed, and then paying (either directly or byreimbursing the affected participants) the NSCC fees applicable totrades executed by the offer matching system. For example, the offermatching system could collect fees from each participant and then payfees directly to NSCC.

[0232] As mentioned earlier, when using the Internet in connection withbusiness transactions, it is desirable to utilize a secure hypertexttransport protocol between a client computer system running a browserprogram and a server computer system running a server program.

[0233] To reduce the risk that unauthorized users will interfere withthe operation of client computer systems connected to the Internet, itis often desirable to insert a “firewall” computer system between clientcomputers running browser programs and the Internet. It is typical toconfigure firewall computer systems to prohibit certain types ofcommunication between the Internet and a client computer system.Sometimes firewall computer systems are configured to block allcommunications unless an attempted communication is contained in a listof permitted communications.

[0234] It is possible to configure a firewall computer system so that itwill pass attempts by a client computer system running a browser toestablish a link over the Internet to port 80 on a server computer(which is the port normally used for hypertext transport protocol), butwill block attempts to establish such a link to port 443 (which is theport normally used for the popular secure sockets protocol).

[0235] Unfortunately, configuring a firewall computer system in such away makes it difficult for client computers connected to the firewallcomputer system to utilize the secure socket layer for securecommunication over the Internet.

[0236] As described below, this problem can be overcome by configuringthe server computer to use port 80 for secure sockets and by directingthe client computer to use port 80 to establish a secure link with theserver computer.

[0237] In a preferred embodiment of the invention, the server computeris an International Business Machines Personal Computer compatiblesystem that is running Microsoft Windows NT 4.0 operating system,Microsoft Internet Information Server Version 4.0 and MicrosoftCertificate Server.

[0238] Following normal setup procedures on the server computer system,establish a web server at a desired internet protocol address (forillustrative purposes only, the discussion below uses address 10.0.0.1,however, those familiar with the art will understand that any desiredvalid internet protocol address can be used) that supports both normalhypertext transport protocol sessions on port 80 and secure socket layersessions on port 443. This will normally require using key manager toassociate a server certificate with the virtual server. Create a defaultweb page on the virtual server and test the installation by using aclient computer running a browser such as Microsoft Internet Explorerversion 4.0 to browse to the default web page using both the normaluniversal resource locator (the normal URL) of “http://10.0.0.1 ” andthe secure socket layer universal resource locator (the SSL URL) of“https://10.0.0.1”.

[0239] On the server computer, start Microsoft Management Console forMicrosoft Internet information server, navigate in the left panel toConsole Root\Internet Information Server\<server name>\<virtual servername>, where <server name> is replaced with the name of the server beingused and <virtual server name> is replaced with the name of the virtualserver being used. Right click on the icon for <virtual server name>,left click on properties in the popup menu. In the form for Properties,select the web site tab and make the following changes:

[0240] change the TCP Port from 80 to any value other than 80 or 443(for example, 8080); and

[0241] change the SSL Port to 80.

[0242] Left click Apply, Left click OK. Shutdown and restart the servercomputer.

[0243] On the client computer, browse to the default page using themodified secure socket layer universal URL (the modified URL) of“https://10.0.0.1:80”. Note that the browser establishes a secure linkto the server computer using port 80 on the server computer.

[0244] Those familiar with the art will appreciate that the modified URLcan be used in many ways that are typical for universal resourcelocators. For example, but not by way of limitation, the modified URLcan be used in hypertext markup language as part of:

[0245] the target for a hyperlink, e.g.: ‘<a href=“https://10.0.0.1:80/default.htm”> click for link</a>’

[0246] the action for a form, e.g., ‘<formmethod=“POST”action=“https://10.0.0.1:80/dump.asp”><p><input type=“text”name=“T1” size=“20”><input type=“submit” value=“Submit” name=“B1”><inputtype=“reset” value=“Reset” name=“B2”></p></form>’ and

[0247] a query, e.g.: ‘<ahref=“https://10.0.0.1:80/dump.asp?parameter=value”> click forquery</a>’.

[0248] Those skilled in the art can readily devise obvious variations onthe various embodiments of the invention as set forth above. Any and allsuch variations are intended to be encompassed within the scope of theinvention, which is defined by the claims which follow.

1] A method for securely communicating with a server program using asecure hypertext transfer protocol which by default uses a first portnumber associated therewith, said method practiced in connection with ahypertext transfer protocol which defaults to the use of a second portnumber associated therewith, said method comprising: (a) configuring theserver program so that it listens for requests for secure hypertexttransfer protocol sessions on the second port number rather than thefirst port number; (b) receiving at the server program on the secondport number a first data packet in a manner that is consistent with thesecure hypertext transfer protocol, except that the request is receivedon the second port number rather than the first port number; (c)outputting from the server program a response to the first data packetin a manner that is consistent with the secure hypertext transferprotocol, except that the request was received on the second port numberrather than the first port number. 2] [c1] The method of claim 1 whereinthe secure hypertext transfer protocol is the https protocol and thehypertext transfer protocol is the http protocol. 3] [c1] The method ofclaim 1 wherein the first port number is 443 and the second port numberis
 80. 4] [c1] The method of claim 1 wherein, before the first datapacket is received by the server program on the second port, it passesthrough a system that is configured in a manner that would block thefirst data packet if the first data packet were addressed to the firstport. 5] [c1] The method of claim 1 further comprising the followingadditional step: after step (a), directing a client program to requestinformation from the server program using a resource locator comprisingan indication to use the secure hypertext transfer protocol and anindication to use the second port number. 6] [c4] The method of claim 4further comprising the following additional step: after step (a),directing a client program to request information from the serverprogram using a resource locator comprising an indication to use thesecure hypertext transfer protocol and an indication to use the secondport number. 7] [c1 ] The method of claim 1 further comprising thefollowing additional step: after step (a), directing a client program topost information to the server program using a resource locatorcomprising an indication to use the secure hypertext transfer protocoland an indication to use the second port number. 8] [c4] The method ofclaim 4 further comprising the following additional step: after step(a), directing a client program to post information to the serverprogram using a resource locator comprising an indication to use thesecure hypertext transfer protocol and an indication to use the secondport number. 9] [c1 ] The method of claim 1 wherein at least one step isperformed using the Internet. 10] A method for operating a web serversystem comprising: (a) configuring the web server system to use port 80for communications using a protocol selected from the group consistingof: secure socket layer, secure sockets layer, SSL, secure hypertexttransfer protocol, and HTTPS; (b) receiving at port 80 at the web serversystem a first data packet that is formatted in accordance with theprotocol; and (c) responding to the first data packet with a second datapacket that is formatted in accordance with the protocol. 11] A webserver system comprising: (a) web server software configured to use port80 for communications using a protocol selected from the groupconsisting of: secure socket layer, secure sockets layer, SSL, securehypertext transfer protocol, and HTTPS; (b) means for receiving at port80 at the web server system a first data packet that is formatted inaccordance with the protocol; and (c) means for responding to the firstdata packet with a second data packet that is formatted in accordancewith the protocol.